Time To Buy Beans?
BOND MARKET RECAP
8/12/2004
September Bonds closed up 0-06 at 110-24. This
was 0-18 up from the low and 0-04 off the high.
September 10 Yr Treasury Notes finished up 0-060
at 112-140, 0-030 off the high and 0-130 up from the low.
The Treasury market was weak early in the
session when it seemed like disappointing economic numbers would be capable of
lifting prices. The trade initially suggested that retail sales were still in
positive ground but the actual reading was well below expectations. However, as
the session wore on the markets began to feed on the liquidation in the equity
market. With the wholesale inventories rising it seems to be clear that the US
economy is manufacturing more goods that the consumers need and that hints at
further slowing. With energy prices rising to yet another new high level it is
very clear that high energy prices are enhancing the bullish outlook for
Treasuries.
Technical Outlook
#BONDS (SEP) 8/13/2004: The market has a slightly
positive tilt with the close over the swing pivot. Near-term resistance for
bonds is at 111.05 and then again at 111.12, while swing support hits at 110.15
and below there at 109.32. A positive signal for trend short-term was given on a
close over the 9-bar moving average. Rising stochastics at overbought levels
warrant some caution for bulls. The next upside objective is 111.12. The market
is approaching overbought levels with an RSI over 70.
T-NOTES(SEP) Momentum studies are trending
higher, but have entered overbought levels. The near-term upside objective is at
112.29. It is a mildly bullish indicator that the market closed over the pivot
swing number. Near-term resistance for the T-Notes is at 112.24 and then again
at 112.29, while swing support hits at 112.07 and below there at 111.27. The
market’s short-term trend is positive on a close above the 9-day moving average.
With a reading over 70, the 9-day RSI is approaching overbought levels.
STOCK INDICES RECAP
8/12/2004
September S&P finished down 12 at 1063.8, 9.9 off
the high and 2.8 up from the low.
September S&P E-Mini closed down 11.75 at 1064.
This was 4 up from the low and 14 off the high.
September Dow closed down 113 at 9818. This was
23 up from the low and 92 off the high.
September Dow E-Mini finished down 110 at 9821,
124 off the high and 36 up from the low.
The stock market continues to decline as most of
the macro economic talk is negative. Outside market forces like rising energy
prices and a sloppy Dollar also seem to be weighing on daily sentiment. It goes
without saying that the ever soaring energy price structure is another major
negative for the equity market. The stock market showed almost no response to
the ongoing favorable dialogue from the FOMC minutes but many traders think that
the Fed’s favorable view is understating the importance of rising energy prices
in the current economy.
Technical Outlook
#S&P500 (SEP) 8/13/2004: The market setup is
somewhat negative with the close under the 1st swing support. Underlying support
comes in at 1057.65 and 1052.98, with overhead resistance at 1070.35 and
1078.38. The close below the 9-day moving average is a negative short-term
indicator for trend. Momentum studies are still bearish, but are now at oversold
levels and will tend to support reversal action if it occurs. The next downside
objective is now at 1052.98. Short-term indicators on the defensive. Consider
selling an intraday bounce.
S&P E-Mini (SEP): The outside day down and close
below the previous day’s low is a negative signal. The sell-off took the market
to a new contract low. The downside closing price reversal on the daily chart is
somewhat negative. Momentum studies are declining, but have fallen to oversold
levels. The next downside target is 1048.50. The swing indicator gave a
moderately negative reading with the close below the 1st support number.
Near-term resistance for the S&P Mini is at 1073.00 and then again at 1084.50,
while swing support hits at 1055.00 and below there at 1048.50. The market’s
close below the 9-day moving average is an indication the short-term trend
remains negative.
NASDAQ (SEP) The market made a new contract low
on the break. A negative signal for trend short-term was given on a close under
the 9-bar moving average. The close below the 1st swing support could weigh on
the market. The market should run into resistance at 1317.75 and above there at
1329.13 with support at 1299.25 and 1292.13. The market is approaching over sold
levels on an RSI reading under 30. Daily stochastics declining into oversold
territory suggest the selling may be drying up soon. The next downside objective
is 1292.13.
MINI DOW (MAR) The close below the 9-day moving
average is a negative short-term indicator for trend. The market should run into
resistance at 9900 and above there at 10003 with support at 9740 and 9683.
Momentum studies are still bearish, but are now at oversold levels and will tend
to support reversal action if it occurs. The next downside target is now at
9683. The market setup is somewhat negative with the close under the 1st swing
support. Short-term indicators on the defensive. Consider selling an intraday
bounce.
CURRENCY MARKET RECAP
8/12/2004
September US Dollar finished down 18 at 8880, 25
off the high and 45 up from the low.
September Euro finished up 0.44 at 122.54, 0.36
off the high and 0.41 up from the low.
September Euro Dollar closed down 0.01 at 98.12.
This was 0.01 up from the low and 0.01 off the high.
September Canadian Dollar closed down 0.35 at
75.07. This was 0.12 up from the low and 0.58 off the high.
September British Pound finished down 0.43 at
181.95, 1.25 off the high and 0.5 up from the low.
September Swiss closed up 0.45 at 79.77. This was
0.3 up from the low and 0.28 off the high.
September Japanese Yen closed up 0.04 at 90.36.
This was 0.35 up from the low and 0.16 off the high.
The Dollar seems to be defying gravity again as
the regularly scheduled economic readings could have been disappointing to
Dollar bulls but yet the Dollar managed to avoid selling pressure. Even with
soaring energy prices the Dollar managed to regain most of the early losses but
in the end the market posted a generally lower trading. On the other side of the
coin the Euro and Swiss just didn’t seem to have the capacity to run higher on
the US failure and that could be because of Wall Street Journal story early this
week that touted a potential breakup of the Euro.
Technical Outlook
#CURRENCIES 8/13/2004: YEN (SEP): A positive
signal for trend short-term was given on a close over the 9-bar moving average.
The market has a slightly positive tilt with the close over the swing pivot.
Swing resistance is targeted at 90.62 and above there at 90.82, with the yen
finding support around 90.11 and below there at 89.80. The market back below the
40-day moving average suggests the longer-term trend could be turning down.
Stochastics are at mid-range, but trending higher which should reinforce a move
higher if resistance levels are taken out. The next upside objective is 90.82.
EURO (SEP): Daily stochastics have risen into
overbought territory which will tend to support reversal action if it occurs.
The near-term upside target is at 1.2330. The defensive setup, with the close
under the 2nd swing support, could cause some early weakness. Swing support for
the Euro comes in at 1.2176, with overhead resistance at 1.2330. The close above
the 9-day moving average is a positive short-term indicator for trend. More
selling pressure is likely given yesterday’s gap lower price action on the day
session chart.
PRECIOUS METALS RECAP
8/12/2004
October Gold closed down 1.3 at 395.2. This was
0.2 up from the low and 3.3 off the high.
September Silver finished up 0.03 at 6.557, 0.093
off the high and 0.067 up from the low.
October Platinum closed up 11.7 at 848.6. This
was 5.6 up from the low and 3.4 off the high.
The gold and silver markets were mostly sluggish
partly because US economic numbers were soft and partly because the Dollar
wasn’t throwing off a specific direction. It is somewhat impressive that both
gold and silver flirted with significant technical failures but managed to hold
together. So far, soaring energy prices and anemic economic readings are not
providing much flight to quality support to the metals. The platinum showed
early strength and appeared to be into an upside breakout but that only gave
minimal support to gold and silver. In the end, the Dollar seems to be capable
of holding steady and that has put off gold buyers.
Technical Outlook
#P-METALS 8/13/2004: SILVER (SEP): The market has
a slightly positive tilt with the close over the swing pivot. Initial support
for silver is at 647.7 and below there at 640.4 with resistance likely at 672.4
and 663.7. A negative signal for trend short-term was given on a close under the
9-bar moving average. Momentum studies trending lower at mid-range could
accelerate a price break if support levels are broken. The next downside
objective is 640.4.
GOLD (OCT): Support for gold today comes in near
392.48, while resistance is pegged at 399.48. Momentum studies are rising from
mid-range which could accelerate a move higher if resistance levels are
penetrated. The near-term upside target is at 399.48. It is a slightly negative
indicator that the close was under the swing pivot. The close below the 9-day
moving average is a negative short-term indicator for trend.
COPPER MARKET RECAP
8/12/2004
September Copper finished down 0.50 at 126.75,
1.75 off the high and 0.45 up from the low.
The copper market flared up early, but then faded
into the close. Not only was the market discouraged by the slide in equity
prices and the sloppy US economic numbers but it was disappointed by the Codelco
1st half production tally. With production rising and demand possibly weakening
the copper market began to have trouble holding prices so far up in the last
months range. Traders continue to suggest that Chinese buying interest is
carrying the day but it had better carry the market because the other
fundamentals are tracking right into the bear camp.
ENERGY MARKET RECAP
8/12/2004
September Crude Oil closed up 0.70 at 45.50. This
was 0.55 up from the low and 0.25 off the high.
September Heating Oil closed up 2.04 at 119.10.
This was 1.75 up from the low and 0.80 off the high.
September Unleaded Gas finished up 3.59 at
129.81, 1.09 off the high and 2.11 up from the low.
September Natural Gas finished down 0.17 at 5.44,
0.13 off the high and 0.00 up from the low.
September Propane closed up 0.01 at 0.87. This
was equal to the low and equal to the high.
The energy market thinks that Yukos is on the
block as the Russian government hired a firm to value the assets of that
company. Therefore, the trade continues to be concerned about a temporary shut
down of that production. Just one of the Russian subsidiaries is reportedly the
same size producer as Algeria. Wit ongoing intense fighting in Najaf many
traders are concerned that the insurgents will attempt to strike the pipeline in
southern Iraq as a last ditch counter-attack. The energy complex might also have
been lifted by comments from Saudi Arabia that they would leave production at
9.3 million barrels per day. Some traders were suggesting that prices were being
bid up in advance of the Venezuelan recall vote this Sunday.
Technical Outlook
#ENERGIES 8/13/2004: CRUDE OIL (SEP): The market
rallied to a new contract high. The close over the pivot swing is a somewhat
positive setup. Support for crude is keyed on 45.10 and below there at 44.63,
with resistance pegged at 45.90 and 46.23. The close above the 9-day moving
average is a positive short-term indicator for trend. Daily stochastics have
risen into overbought territory which will tend to support reversal action if it
occurs. The near-term upside target is at 46.23. The market is becoming somewhat
overbought now that the RSI is over 70.
UNLEADED GAS (SEP): Stochastics are at mid-range,
but trending higher which should reinforce a move higher if resistance levels
are taken out. The next upside objective is 132.76. The market has a slightly
positive tilt with the close over the swing pivot. Resistance today is at
132.76, while support should be found around 126.36. If yesterday’s gap higher
on the day session chart holds, additional buying could develop this session. A
positive signal for trend short-term was given on a close over the 9-bar moving
average.
HEATING OIL (SEP): The close over the pivot swing
is a somewhat positive setup. Heating oil should encounter support around
116.31, with resistance is at 121.41. The close above the 9-day moving average
is a positive short-term indicator for trend. Momentum studies trending lower
from overbought levels is a bearish indicator and would tend to reinforce lower
price action. The next downside target is now at 116.31.
CORN MARKET RECAP
8/12/2004
September Corn finished down 2 3/4 at 218,
1 3/4 off the high and 2 up from the low. December Corn closed down 3 at 229.
This was 3 up from the low and 1 1/4 off the high.
The USDA news of a bumper crop helped drive
futures lower early in the session. The USDA pegged corn production at 10.923
billion bushels as compared with the average trade estimate of 10.78 billion
bushels (range 10.66-10.952). Last months production forecast was 10.635 billion
bushels. Funds were noted sellers of near 6000 contracts by mid-session. Average
yield was pegged at a record 148.9 bu/acre. Ending stocks were pegged at 1.132
billion bushels as compared with the average trade estimate at 1.166 billion
bushels (range 1.071-1.3). Ending stocks were below expectations while
production was higher than expected as feed usage and industrial usage was
revised higher. World ending stocks for the 2004/2005 season were pegged at
85.67 million tons from 75.86 million tons last month, 92.53 million tons this
year, 122.2 last year and 148 million tons two years ago. On top of the higher
US crop estimate, the USDA raised China production by 5 million tons to 120
million tons from 115.8 million tons last year. Weekly export sales came in at
776,300 tons as compared with trade expectations of 700,000-900,000 tons.
Support for December corn come in at 225 and 219 1/2 with resistance at 230 1/4
and 232.
Technical Outlook
#CORN (DEC) 8/13/2004: Momentum studies are
rising from mid-range which could accelerate a move higher if resistance levels
are penetrated. The near-term upside target is at 232 3/4. The market setup is
somewhat negative with the close under the 1st swing support. Market resistance
comes in at 232 3/4 today, with support at 224 1/4. The close below the 9-day
moving average is a negative short-term indicator for trend. More selling
pressure is likely given yesterday’s gap lower price action on the day session
chart.
SOY COMPLEX RECAP
8/12/2004
September Soybeans finished up 28 1/2 at 590, 8
off the high and 16 1/2 up from the low. November Soybeans closed up 30 1/2 at
585 1/4. This was 20 1/4 up from the low and 4 1/4 off the high.
August Soymeal closed up 6.7 at 195.0. This was
3.0 up from the low and 3.0 off the high.
August Soybean Oil finished up 0.85 at 24, 0.2
off the high and 0.7 up from the low.
The biggest surprise for the grain reports was
the news that the USDA lowered their yield estimate to 39.1 bushels per acre
from 39.9 last month. The USDA pegged soybean production at 2.877 billion
bushels as compared with the average trade estimate at 2.958 billion bushels
(range 2.889-3.022). Last months estimate was 2.94 billion and last year was
2.418 billion. Ending stocks were estimated at 190 million bushels as compared
with the average estimate at 255 million bushels (range 199-290) vs. 210 million
bushels from last months report and 105 million bushels at the end of this
season. While the US data was considered supportive short-term, world ending
stocks were pegged at a record 50.20 million tons from last months estimate of
47 million and 36.19 million tons this year. China demand fell 1 million tons to
23 million tons. Demand forecasts for the US were also revised lower with crush
demand down 20 million bushels from last month to 1.625 billion bushels and
exports also down 20 million to 1.03 billion bushels. The oversold technical
condition of the market along with the supply shock helped support active
buying. In addition, cash basis levels were firm. Weekly export sales came in at
232,000 tons for soybeans as compared with trade expectations of 350,000-500,000
tons. Meal sales were 129,900 tons from expectations of 30,000-60,000 tons and
oil sales were 30,300 tons from 25,000-30,000 expected. November soybean
technical support moves up to 570 with 590 1/2 and 613 3/4 as resistance.
Technical Outlook
#SOYBEANS (NOV) 08/13/04 The market has a bullish
tilt coming into today’s trade with the close above the 2nd swing resistance.
The next area of resistance is around 597 2/4 and 605 3/4, while 1st support
hits today at 573 and below there at 556 3/4. The market’s close on the 9-day
moving average is neutral. A bullish signal was given with an upside crossover
of the daily stochastics. The next upside objective is 605 3/4.
MEAL (DEC): The daily stochastics gave a bullish
indicator with a crossover up. The near-term upside target is at 180.4. First
resistance comes in at 178.1, with support at 173.4. The close above the 9-day
moving average is a positive short-term indicator for trend. Market positioning
is positive with the close over the 1st swing resistance. Short-term indicators
suggest buying pullbacks today.
BEAN OIL (DEC): A positive signal for trend
short-term was given on a close over the 9-bar moving average. Stochastics are
at mid-range, but trending higher which should reinforce a move higher if
resistance levels are taken out. The next upside objective is 23.31. Since the
close was above the 2nd swing resistance number, the market’s posture is bullish
and could see more upside follow-through early in the session. If yesterday’s
gap higher on the day session chart holds, additional buying could develop this
session. Daily swing resistance is found at 22.92 and above there at 23.31.
Support should be encountered at 21.73 and 20.93.
WHEAT MARKET RECAP
8/12/2004
September Wheat finished down 5 1/4 at 299 1/2, 4 1/2 off the
high and 1 1/2 up from the low. December Wheat closed down 5 1/2 at 314. This
was 2 1/2 up from the low and 4 off the high.
The USDA reports this morning were considered
bearish with downward revisions for demand and higher revisions for supply
helping to attract new selling. The USDA pegged all wheat production at 2.123
billion bushels as compared with the average trade estimate of 2.072 billion
bushels. For ending stocks, the USDA came in at 578 million bushels as compared
with the average trade estimate at 505 million bushels (range 485-530). Last
months forecast was 494 million bushels and last year was 546 million bushels.
Production was revised higher and exports lower which contributed to the bearish
ending stock news. For the world report, ending stocks were pegged at 142.32
million tons from 132.24 million tons last month, 132.3 million for the
2003/2004 season, 167.3 million 02/03 and 202.1 million in the 01/02 season.
Production jumped by near 10 million tons. World exports, however, are projected
at 105.7 million tons from 106.9 last year and 108.4 million two years ago.
Spring wheat production was pegged at 544 million bushels vs. the average trade
estimate of 511 million bushels (range 498-520). This is up from 501 million as
last months estimate and 533 million bushels last year. Weekly export sales came
in at 565,900 tons as compared with trade expectations of 400,000-500,000 tons
and 360,400 tons necessary each week to reach the USDA projection. Cumulative
sales have reached 40.3% of the USDA forecast for the season as compared with
26.8% on average for this time of the year. Even with the fast pace, the USDA
lowered their forecast for exports by 25 million bushels to 950 million bushels.
The next support for December wheat comes in at 311 and then 307 1/2 with 315
and 318 3/4 as resistance.
Technical Outlook
#WHEAT (DEC) 8/13/2004: The market made a new
contract low on the break. The gap lower on the day session chart is bearish and
puts the market on the defensive. The close below the 1st swing support could
weigh on the market. Expect near-term support around 310 2/4 and below there at
307 3/4, with resistance levels at 317 and 320 3/4. A negative signal for trend
short-term was given on a close under the 9-bar moving average. Daily
stochastics declining into oversold territory suggest the selling may be drying
up soon. The next downside objective is 307 3/4. The market is approaching over
sold levels on an RSI reading under 30.
LIVE CATTLE RECAP
8/12/2004
October Live Cattle closed up 0.22 at 87.52. This
was 0.75 up from the low and 0.62 off the high.
October Feeder Cattle finished up 0.20 at 112.47,
0.12 off the high and 1.02 up from the low.
October cattle closed slightly higher on the
session after the early break failed to attract new selling. Fund selling
pressured the market early but talk that at least one packer was raising bids
helped to support. Boxed-beef cut-out values were down $.44 to $137.27 at
mid-session as compared with $138.34 last week at this time. Today’s estimated
cattle slaughter came in at 125,000 head as compared with trade expectations at
122,000 to 128,000 head. The lack of cash trade kept the buying subdued. The US
Agriculture undersecretary indicated that some US beef exports to Japan could
begin by early fall.
Technical Outlook
#CATTLE (OCT) 8/13/2004: Momentum studies
trending lower at mid-range could accelerate a price break if support levels are
broken. The next downside objective is 86.12. The market tilt is slightly
negative with the close under the pivot. Support should be encountered at 86.85
and below there at 86.12. Market resistance is at 88.22 and then again at 88.87.
The daily closing price reversal up is a positive indicator that could support
higher prices. A negative signal for trend short-term was given on a close under
the 9-bar moving average.
LEAN HOGS RECAP
8/12/2004
October Lean Hogs closed down 0.22 at 66.80. This
was 0.25 up from the low and 0.50 off the high.
February Pork Bellies finished down 1.00 at
93.35, 1.65 off the high and 1.17 up from the low.
Hogs closed mixed, with the August contract
gaining on the session and October extending yesterday’s losses. Cash hogs
remained under pressure today with terminal markets $1-$2 lower. Packers
reportedly have adequate supplies for the week and prices are expected be weak
tomorrow and into early next week. August bellies were limit down for the second
session in a row as the cooler summer has apparently put a damper on bacon
demand. The 2-day lean index for the period ending August 10th was 79.69, down 4
cents from the previous day to 79.69 but up from 79.42 the week before. Today’s
estimated slaughter came in at 388,000 head, which was at the top end of
expectations ranging from 382,000 to 388,000.
Technical Outlook
#HOGS (OCT) 8/13/2004: It is a slightly negative
indicator that the close was under the swing pivot. Resistance levels comes in
at 67.17 and 67.62 today, while support is around 66.42 and then 66.12. The
close below the 9-day moving average is a negative short-term indicator for
trend. The close below the 40-day moving average is an indication the
longer-term trend is down. Stochastics trending lower at midrange will tend to
reinforce a move lower especially if support levels are taken out. The next
downside target is now at 66.12.
COCOA MARKET RECAP
8/12/2004
September Cocoa finished up 35 at 1616, 22 off
the high and 35 up from the low.
The cocoa market was surprisingly higher but at
times was testing negative territory. After seeing cocoa prices soar on dry
conditions it’s a little surprising that the market shrugged off stories that
Nigerian farmers were having trouble drying cocoa between bouts of rain.
Apparently spec buying was noted by the Press instead of fund buying and that
would seem to mean that the buying is being done by slightly less strong hands.
Technical Outlook
COCOA (SEP) 08/13/04 The market has a slightly
positive tilt with the close over the swing pivot. Cocoa should run into
resistance at 1645 and above there at 1670 with support at 1588 and 1556.
Negative momentum studies in the neutral zone will tend to reinforce lower price
action. The next downside target is 1555.75.
COFFEE MARKET RECAP
8/12/2004
September Coffee closed down 1.55 at 65.55. This
was 0.45 up from the low and 1.75 off the high.
September coffee closed sharply lower after
falling to its lowest level since putting in a contract low on August 5th. Heavy
spec and fund selling was noted after the market broke through trendline support
that had been in place since that low was put in place. Dry conditions are
expected in Brazil for the next seven days, which will be conducive to harvest,
and the cooler weather in the forecast is not expected to damage the crop.
Brazil will release a revised forecast of the 2004 coffee crop on Friday, after
the markets close. Traders are is expecting a lower the estimate from the
previous forecast of 38.3 million bags that was made last April, due to
unusually wet weather. Even with the revision, the crop would still be
substantially higher than last year’s 28.8 million bags.
Technical Outlook
COFFEE (SEP) 8/13/04 There could be some early
pressure today given the market’s negative setup with the close below the 2nd
swing support. The 9-day RSI under 30 indicates the market is approaching
oversold levels. Daily stochastics are showing positive momentum from oversold
levels which should reinforce a move higher if near-term resistance is taken
out. The near-term upside objective is at 68.10. The Coffee contract should run
into resistance at 66.70 and above there at 68.10 with support at 64.5 and
63.70. The market’s short-term trend is negative as the close remains below the
9-day moving average.
SUGAR MARKET RECAP
8/12/2004
October Sugar closed up 0.08 at 7.98. This was
0.15 up from the low and 0.01 off the high.
October sugar futures opened weak but closed
firmer, managing to take back some of their losses from the day before. Initial
spec selling faded, and trade buying came in and supported the market. The sugar
merchant Czarnikow, in its first estimate for 2004/05, is forecasting a 4.85
million ton world sugar deficit, with world production estimated at 143.18
million tons and consumption at 147.03 million. Brazil’s sugar cane crush for
its main south central region has reached 106.3 million tons, which is 12.3%
behind last year, while sugar production is down 8.5%. Unseasonably wet weather
in May through July is being blamed for the delay in harvest.
Technical Outlook
#SUGAR (OCT) 8/13/2004: The upside daily closing
price reversal gives the market a bullish tilt. Market positioning is positive
with the close over the 1st swing resistance. Swing resistance comes in at 8.11,
with support found at 7.79. The close below the 9-day moving average is a
negative short-term indicator for trend. Stochastics trending lower at midrange
will tend to reinforce a move lower especially if support levels are taken out.
The next downside target is now at 7.79.
COTTON MARKET RECAP
8/12/2004
October Cotton finished down 1.86 at 43.02, equal
to the high and 1.02 up from the low.
December cotton opened 276 lower on the session
and posted new contract lows at 42.60 early in the session before a recovery
bounce into the close. The close was still sharply lower on the session in
response to the bearish USDA report. The USDA pegged production at a whopping
20.18 million bales as compared with the average pre-report forecast of 18.878
million bales (range 18.5-19.4). Ending stocks for the 2004/2005 season are now
projected at 5.9 million bales as compared with the average trade estimate of
5.44 million bales (range 4.9-6.0) and last months estimate of 4.5 million
bales. Traders were fearful that world production could move over 105 million
bales from 104.73 as last months forecast but the new forecast came in at 106.59
million bales. World ending stocks are now pegged at 39.22 million bales from
last month’s estimate of 37.79 and last year at 33.01 million bales. Weekly
export sales came in at 286,100 bales as compared with trade expectations of
225,000-275,000 bales and 127,900 bales necessary each week to reach the USDA
projection. Cumulative sales have reached 39.7% of the USDA forecast for the
season as compared with 35.4% on average for this time of the year.
Technical Outlook
#COTTON (OCT) 8/13/2004: A negative signal for
trend short-term was given on a close under the 9-bar moving average. There
could be some early pressure today given the market’s negative setup with the
close below the 2nd swing support. Next resistance area comes in at 43.53 and
then again at 43.79, while support is targeted at 42.51 and 41.75. Stochastics
are at mid-range, but trending higher which should reinforce a move higher if
resistance levels are taken out. The next upside objective is 43.79. The market
is approaching over sold levels on an RSI reading under 30. The market made a
new contract low on the break. The gap lower on the day session chart is bearish
and puts the market on the defensive.